Broker Alex has a signed seller agency agreement with homeowner Patricia, who is selling her Denver home for $550,000. During showings, buyer Carlos tells Alex that he is willing to pay up to $575,000 if necessary. What must Alex do with this information under Colorado agency law?
Correct Answer
B) Disclose Carlos's maximum price to Patricia because Alex owes her fiduciary loyalty as her agent.
Under Colorado single agency law (C.R.S. § 12-10-401 et seq.), when a broker has a signed seller agency agreement, the broker owes full fiduciary duties to the seller, including the duty of loyalty and the duty to promote the seller's best interests. Carlos's willingness to pay up to $575,000 is information that directly benefits Patricia's negotiating position, and Alex is obligated to disclose it to her as her agent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
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